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Jan 13 • 6 tweets • 1 min read
USA constitution was based on sound money backed by Gold. Currently our two biggest adversaries are openly encouraging their allies to dump the $ for Gold. These 2 adversaries are the #1 & #2 producers of Gold. Does not make me happy that the powers to be do not understand this.
Our current account deficit has been past danger zone for 2 decades. If our analysis is correct, we either balance our budget or the US standard of living is about to fall off the cliff: milkshakes melting.
The rest of the world has decided not to lend money to us so that you can receive your social security check. Congress spent the money you put in on wars & and healthcare subsidies. FED either prints or your payment will have to be cut; the money is not there: let that sink in.
The big short of this cycle is the US Treasury's finances; feel free to reply with why I am wrong.
I will argue mathematics; your best argument will be either exceptionalism or military strength.
Please do not argue milkshakes; now that the petro $ is gone. Better to think polar opposites of milkshakes.

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More from @GaricMoran

Garic Moran Profile picture
Sep 25, 2021
The FED is trapped?

The last time the FED raised rates above the rate of inflation, the Great Financial Crisis began. Since then the FED has run the easiest monetary policy in their history. In 1979 Paul Volcker raised rates to 20% causing a severe recession...
...13 years of extraordinarily low interest rates has created the largest financial bubble in US history. As the recent recession began, the FED immediately ramped QE4 to support financial assets. The bubble grew larger, but this time inflation broke out...
... If raising rates above inflation in 2006-2007 caused the GFC, what would raising rates above inflation do now? The fact that inflation is running twice as high as the FED's forecast & they only signaled a taper as to not upset financial markets is all you need to know..
Read 4 tweets
Garic Moran Profile picture
Sep 25, 2021
Gold continues to consolidate near all-time-highs on the monthly chart. The technical pattern continues to be a clear cup and handle formation. The fact that US bullion banks are covering shorts below $1800 suggests to us that $1700-$1800 remains major support. Last year FED... Image
...Chair Powell told Congress that surging money supply no longer had any correlation w/ inflation. We disagreed as the monetary history of the world suggested otherwise. M2 continues to grow significantly faster than nominal GDP: "Too much money chasing too few goods"... Image
Last week's Markit September Flash composite index reported continued surging prices & continued weakening employment. The FED signaled they would only monetize an additional $720B of Treasuries & mortgages over the next 10 months guaranteeing money supply will continue to... Image
Read 11 tweets
Garic Moran Profile picture
Jul 11, 2021
The FED has long believed that inflation expectations create inflation. Prices are rising rapidly; yet financial markets do not expect inflation (stox would not have 22 multiple, Treasuries would not be @ 1.3%, & Gold would not be down on year). Sooner or later investor...
...expectations will change. In 2007 & 2008 housing prices fell, yet financial markets were in denial until they were not. This is the exact opposite. Sooner or later investors will sell negative real yield bonds & buy Gold. As that occurs inflation expectations will begin..
..to rise. The FEDs only tool is moral suasion. Any attempt to reverse the most inflationary monetary policy in the FEDs history will crash financial markets. They will then have repeated the 1929 fiasco. It is engrained in FED philosophy, since Dr. Bernanke joined them in 2002..
Read 5 tweets
Garic Moran Profile picture
Jul 11, 2021
3 years ago Janet Yellen claimed we would not have another financial crisis in her lifetime. Now inflation is surging:

Higher Inflation Is Here to Stay for Years, Economists Forecast wsj.com/articles/highe…
..Many analysts were skeptical of her claim; check my feed, I said the FED could prevent the largest bubble in US History from popping. But that meant unlimited balance sheet expansion & money supply growth. The FED & Yellen are now both claiming inflation is transitory. They..
..dismiss that supporting financial assets & deficit spending at all costs is what is causing rapid money supply growth & too much money chasing too few goods. I expect J Powell to repeat in front of Congress, the FED has the tools to fight inflation. I do not expect him to..
Read 5 tweets
Garic Moran Profile picture
Apr 28, 2021
I began to forecast inflation last Summer when the FED began the Great Monetary Expansion. I pointed out that Volcker ended the 1970's inflation by targeting money supply; therefore, the FED could create inflation by allowing money supply to grow at an unlimited rate..
...last Winter, I said nominal GDP would surge given the tremendous fiscal & monetary accomodation, but no one could accurately forecast how much of this nominal GDP increase would be price increases and how much would be real economic growth...
...it is now becoming clear to me, that inflation is surging way above anyone's economic forecasts. Yes, we know the FED will use the BLS's hedonistic accounting to understate these increases & over report real economic growth. But in the real world we are now seeing, velocity..
Read 8 tweets
Garic Moran Profile picture
Oct 17, 2020
Gold is now in the third month of consolidating; I view this chart pattern as a bullish consolidation as Managed Money speculative positions are now down 65% from previous highs. One fundamental positive last week, was India returning to a premium to world markets. Indian...
& Chinese consumer demand were major support for Gold during the bear market. Both consumers backed off once Gold broke out last summer, we expect pent up demand out of these 2 huge buyers of physical Gold. So far, Chinese consumers do not appear to be on the bid. The dollar...
appears to be in a bearish consolidation pattern. So I do not view this as a negative for Gold. Treasury market continues to look like it is no longer a market, but is now fixed in a trading range. News that the Fed purchased larger amounts of Treasuries than usual last week as..
Read 12 tweets

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